People should carry out a risk assessment of their own, and make an informed choice about whether they actually need the insurance

Tony Levene, author, Which? Money Saving Handbook

It said many people were paying for insurance when they were already protected by existing policies, while others were taking out cover which was unlikely to pay out.

For example, under the banking code, innocent victims of identity fraud should be reimbursed by their bank or building society.

In addition, Which? argued accidental death and injury cover is often included under life insurance, while mobile phones may be protected as part of contents insurance.

In the case of PPI - subject of a long-running Which? campaign - the consumer body highlighted high premium costs and "high obstacles" which often prevent successful claims.

It is supposed to cover repayments on loans, mortgages and credit cards if the borrower is unable to make them as a result of accident, sickness or unemployment.

But it has been widely criticised for being expensive and offering limited benefits to policyholders.

"The insurance industry's favourite phrase is "peace of mind", but it uses this to justify policies that cost a lot and are almost impossible to claim against," said Tony Levene, author of the Which Money Saving Handbook.

"Instead of just blindly following what the salesman says, people should carry out a risk assessment of their own, and make an informed choice about whether they actually need the insurance, and whether it's worth the premium," he added.

Complaints

PPI has proved extremely controversial in recent years.

Earlier this month the Financial Services Authority fined HFC Bank, part of the HSBC group, £1m for failing to ensure 163,000 consumers were properly advised when they bought the company's PPI.

The sale of insurance is regulated but consumers should also be asking questions so that they can decide if a product is right for them

Nick Starling, ABI

This was the ninth, and largest, fine the regulator has so far levied for failings in this field.

The Financial Ombudsman Service (FOS) has also seen a sharp increase in PPI complaints.

It has received more than 5,000 complaints in first nine months of the present financial year, compared with just under 2,000 at the same point last year.

Complaints about motor insurance have also risen by 30%.

Responding to the Which? research, the Association of British Insurers (ABI) said it was up to consumers to make sure they do not waste money on unnecessary cover.

"It is important that people look into their individual circumstances to ensure they have adequate insurance for their needs, particularly for life changing events such as unemployment and ill-health," said ABI director Nick Starling.

"The sale of insurance is regulated but consumers should also be asking questions so that they can decide if a product is right for them."

In terms of PPI, he added, the FSA has acknowledged that "when correctly sold", the insurance provides "valuable protection for many customers".